Marketing Clique

B2B marketing automation software company, Marketo, has partnered with marketing industry research leader MarketingSherpa to produce a marketing automation industry report entitled, CMO Perspectives On B2B Marketing Automation: Strategies for automating the marketing-sales pipeline.

• Download the report from the Marketo website for free (thru February 2011).

Marketing Automation Is About Generating Better Leads

According to this industry report on marketing automation, 76% of Chief Marketing Officers (CMOs) agree that generating high quality leads is the most pertinent marketing challenge they face. The data was collected from nearly 300 respondants and is statistically significant.

While generating leads has always been marketing's charter, generating better leads has always been a challenge. That's one of marketing automation's strong suits: you can use slow-drip marketing tactics to help ensure the leads that finally make it "over the wall" to sales are as high quality and ripe as possible.

Too often, leads are contacted by sales too early, too often, or the prospect simply isn't the right fit. The process of implementing and using marketing automation helps to alleviate this conundrum.

Key Marketing Automation Insights From The Report

This report offers some strong data points to help support the marketing automation industry niche - a market that some people suggest is floundering.

• 70% of the CMOs interviewed are in the process of, or have implemeted marketing automation software.
• 76% of CMOs say that they need higher quality leads.
• 84% of CMOs indicated that there are three to four decision-makers involved in the buying process of their product.
• 89% report that their product's buying cycle spans over more than one month.

Research Methodology

This report was published as a cooperative effort between MarketingSherpa and Marketo. MarketingSherpa has an objective Partnered Research Program that makes these types of reports possible. MarketingSherpa's involvement means they are getting a sufficient demand for this type of marketing automation industry research. And Marketo's willingess to participate reflects their commitment to supporting the industry segment as a whole, and not solely beating their own chest. Kudos to both Marketo and MarketingSherpa!

To preface my argument I want to start with three points:

1. Growing companies face many online marketing struggles. And one of the challenges is on whom they should be focusing their marketing and sales efforts.
2. Most companies think their baby their product is very, very important is strategic. But that's rarely the case. Most of the time it's tactical. Occasionally it's both strategic and tactical.
3. One of the cliché recommendations that management likes to chirp is, "We need to be selling higher in our prospect organizations. We need to get more sales meetings with the C-level." The trouble is that most products aren't sold at the C-level. They may require sign off from the C-level, but the decision making is happening at other levels. Decision-making happens over time. And many people are in on the decision-making process. Actually, this is a fundamental reason why marketing automation works.

A recent blog post from Marketing Automation Software entitled, Why the Marketing Automation Market Is Floundering & 5 Fixes to Fuel It is another example of a strategic thinker making a recommendation that doesn't quite fit. The author, Jeff Pedowitz' first recommendation for fixing what he describes as a "floundering" market is to sell over the marketing department because they don't have the budget.

I don't agree that the marketing automation market is floundering. The fact is that the top two marketing automation leaders (Marketo and Eloqua) are experiencing impressive growth and attracting real investment. Ancillary companies, like ReachForce, are also experience growth on the coat tails of marketing automation.

And secondly, I think Pedowitz' recommendation to sell beyond or over marketing is incomplete logic. As an example, everyone is interested in their computer working, it's mission-critical, and affects core revenue-generating departments within a company. But that doesn't mean you sell to the CEO. Instead, you sell to the IT Director and make additional resources available to the other parts of the organization, people in charge of due diligence, IT steering committees, or whatever.

One of the positive, yet sometime unanticipated outcomes of installing marketing automation software is more alignment between sales and marketing. Marketing and sales have always enjoyed a love-hate relationship, but now marketing is increasingly being held accountable for helping to drive revenue. Sales recognizes why this is important. And that's why both marketing and sales are involved with the decision to implement a revenue performance management system.

Marketing automation salespeople need to keep selling to the marketing executive. And marketing automation is clearing not "floundering."

Ultimately, both sales and marketing will get pulled into the decision-making process. And the CEO will sit up and take notice if the investment of budget and time is noteworthy. But I can practically guarantee you that it will be both the marketing and sales leaders that will continue to be the most influential people in the marketing automation purchase process.

You've heard the buzz about marketing automation. And you've even started to consider which marketing automation vendor you should be considering. But is this all just a fad? Is marketing automation just sophisticated email marketing?

The answer is that no, it's not just a fad. And last month's Teradata-Aprimo acquisition announcement adds further credibility to this growing marketing automation niche market.

Lauren Carlson over at Marketing Automation Software Guide wrote up an informative synopsis:

Expectations aside, there is still much to be said about the implications of this deal. Does this signal a move by Teradata into the B2B market? What does this mean for the marketing automation market in 2011? What additional M&A activity can we expect to see? (read the article...)

The Take-Away For Sales & Marketing

Marketing automation continues to get validated. Big companies are starting to invest big dollars. The Teradata-Aprimo acquisition announcement proves this. And Marketo's recent $25 million in additional venture capital funding is another indicator. In all, an estimated $150 million has been invested in the leading marketing automation vendor companies.

Consider whether your organization could benefit from lead scoring and marketing automation. The effectiveness of marketing automation boils down to your organization's ability to feature engaging, authoritative content that educates and entertains your prospects and customers. This, in turn, will help guide your prospects to purchase, and your clients to upgrade and continue buying from you.

Step one is realizing that your organization will benefit from marketing automation software. But getting past step one can be a daunting task, especially when you are trying to distill your vendor choices down to a short list.

This handy interactive graphic from Marketing Automation Software Guide helps the savvy online marketer quickly categorize who's who in the marketing automation world. While it's not exhaustive it's certainly a great place to start and features most of the leading marketing automation companies:

Doing Your Due Diligence - Avoid The Traps

Cogent marketers will realize that selecting a marketing automation vendor requires due diligence. It's an important decision and requires a significant investment of company resources.

Once you've selected a vendor you can learn from understanding some of the common traps into which many of the pioneer marketing automation users have fallen. Following are three of the traps that Jeff Ernst, Principal Analyst at Forrester Research, highlights in a recent blog post:

• The process trap. They don't get buy-in and support from the sales organization, so they generate more leads without changes to how sales works those leads.
• The content trap. They don't anticipate that effective, targeted lead nurturing greatly increases the content requirements.
• The skills trap. They don't have people with the skill sets to define their customer buying cycles and information needs at each stage.

Ask For Help

Before you take the next step, regardless of where you are in the selection/installation process ask for support from your vendor, get advice on marketing software choices, consult with other marketing professionals, and consider outsourcing parts to a consulting organization that has experience developing and automating lead flow.

Should Marketing Automation be re-named Email Automation? Isn't it true that so-called lead management automation is really just a dressed up autoresponder?

Automated lead nurturing is one of the reasons companies invest in a marketing automation platform. The lure of slow drip marketing is that salespeople don't get bogged down working immature leads. Instead, the prospect is teased with a series of emails that maintain contact and offer different goodies [bait] along the way: invitations to free webinars; invitations to download free whitepapers (eBooks), case studies; invitations for free product demos; invitations to visit salespeople at upcoming conferences. Then, once the lead has been nurtured and is ripe for the picking, the salesperson is unleashed to lap up the new business.

Is it really that easy?

Yes, because when it's implemented correctly, lead management can translate into an increase in sales. Furthermore, the volume of leads your company can now handle increases dramatically. And sales still is, in part, a numbers game.

No, it's not that easy because success of the campaign hinges on the ability of marketing and sales to work together as a team. What's more, there is a pesky little thing called content that has to be of exceptional quality, value, well-thought-out and accessible.

What should be the goal of lead nurturing?

We ultimately want the lead we're nurturing to take the desired action, right? Right! But remember, the desired action might not be a purchase, per se. The interaction may not be solely with a prospect. And our reaction may not necessarily be an email:

• Use marketing automation to stay in touch with high value mavens. Maybe you've identified bloggers for whom you want to provide high quality and special content about your products and services.
• Put your new customers on a slow drip enrichment campaign and introduce them to the wonderful new features and benefits of doing business with you. Introduce certain types of stuff to certain types of customers.
• Before they sign on as customers, use lead nurturing to encourage prospects to interact with people at your company and begin feeling like they're part of your community. The value of community is strong. It's a powerful way to make your company more cult-like.
• Make some of the lead nurturing triggers result in something other than email! For example, one of the triggers can result in a call from a human being outside of the sales department. Use old-fashioned marketing tactics like sending the prospect a hand-written note from the VP of Marketing thanking them for attending the latest webinar. Send the prospect a FedEx package. Everyone opens an overnight FedEx envelope that's sent to them.
• If your product is distributed through the channel, set up a routine for sending the reseller special kudos when they meet certain criteria. Maybe it's an email, but maybe it's a quick congrats call from your CEO.

However you slice or dice it, there's no getting around the fact that marketing automation and lead nurturing has wiggled its way into the world of marketing and sales. The following infographic is from Forrester Research analyst, Laura Ramos, and it's useful for visualizing where lead nurturing can "plug the leak."

What's the takeaway for marketing and sales?

Be creative and avoid becoming myopic about your new marketing automation campaign. It's not only for creating autoresponder email messages to prospects!

The process of implementing marketing automation can be an excellent exercise in understanding how sales and marketing can work more effectively together. The result? More business. I've been through two of these processes and can attest that it is helpful in bringing both marketing and sales to the same table.

Ultimately, marketing and sales should be coming together to define a process that can be done time and again. Campaigns can differ, but having an established underlying processes, combined with the right people and the right IT is the magic recipe. The following excerpt from a recent Manticore Technology whitepaper describes this well:

Marketers tend to think about marketing automation in the context of "campaigns." In reality, it's a layer above campaigns. Properly implemented, it's used to build a repeatable process to ensure that only qualified leads are sent to Sales, while the remaining leads are engaged in an ongoing, targeted dialogue to nurture their interest. With a strong process, the other two components, people and technology, can fall in place. Naylor Gray, director of marketing at Frost & Sullivan, sums it up this way: "Effective and sustainable marketing that drives revenue must be built on the right processes, technology and people. Companies that adhere to best practices along these lines close a lot more business. For Marketing to play a key role in the growth of a company, we believe you need to start with process, which guides and validates the people and technology investments." "With a strong process, the other two components, people and technology, can fall in place." —Manticore Technology Whitepaper

What this means to marketing

Take a leadership role and ensure that both marketing and sales are focused on the forest, not just the trees, by providing a roadmap for implementing whatever marketing automation you choose. Ensure that process is overarching. Sometimes salespeople need to be reigned in because they are feverish about specific campaigns and closing business ASAP. And sometimes sales can help keep marketing focused on what drives market share: signing more business.

Marketing automation software continues to gain momentum. The reason marketing automation has become so appealing is because it allows businesses to do more with less—more marketing and sales with fewer marketers and salespeople. And one of the helpful side effects of the software implementation process is that it encourages a much-needed alignment of marketing and sales.

But the real value of anything a business implements is how it will help to attract and retain customers. A company's decision about which marketing automation software to purchase and how to implement it once they have committed to it are paramount. And the purchase decision can have a profound impact on marketing, sales, and IT.

Use marketing automation for lead nurturing

The most appealing aspect of marketing automation is the ability to automatically manage a lead—managing the buyer who has decided to begin evaluating your product but who is not quite ready to pull the trigger and sign on the dotted line. Traditionally, salespeople have managed this process. But salespeople get antsy, call the prospect too much, and if the prospect doesn't buy in a "reasonable" amount of time the salesperson moves on too soon. But what if that buyer is on one of those long and winding roads to purchase? What if there are little nuggets of value you can spoon feed the buyer during that long-and-drawn-out buying process? Lead management software helps salespeople spend more time with fewer prospects.

Use marketing automation to deliver the right value to the right prospect at the right time

The beauty of being able to automatically score a lead and begin the whole nurturing process is that you can begin to segment your marketing efforts. Naturally, there are some prospects for whom you want to roll out the red carpet. And while you certainly don't want to dismiss the other prospects, perhaps you know that they can be effectively developed without as much attention.

Demand generation is most effective when you're delivering something of value during the research phase before a buyer purchases.

Traditional pamphlets and brochures filled with marketing jargon just don’t cut it anymore. Buyers are looking for informative and interesting content that provides actual value and education. They expect vendors to provide them the content they need throughout the sales cycle. Increasingly, the first two-thirds of that cycle is spent researching the market and vendors, without regular contact with a sales rep. To remain top of mind with the buyer and claim the "thought leadership" position, marketers are deploying marketing automation to provide a steady stream of educational content for buyers.
—Lauren Carlson, Tailwinds for Marketing Automation Software

I think Lauren has a strong point. But what is that pearl of value that we should be giving away to our prospect? This is where the collaboration between marketing and sales can really pay off. Sales will reveal what the buyers are asking for, and marketing can help to develop the types of valuable devlierables that can be used during the lead nurturing process. These deliverables are apt to be different for different types of buyers.

Beware of the overuse of email

A recent Forrester Research report points out that marketers are overusing the email feature in marketing automation. Just because you've got a marketing automation tool that can deliver a customized email every week doesn't mean that will be the most effective deliverable for the prospect.

• If you can imagine that your qualified prospects are simply customers that haven't yet officially signed on, what would you be providing them? Is there anything you can provide that will be valuable for them and not incrementally cost you and your team substantially more time and money to deliver?

I think marketing automation is here to stay and it's an exciting new development in the whole world of customer relationship management (CRM). But like many other evolutions at the crossroads of IT and business there is due diligence that needs to happen before the purchase, and cogent analysis of the planning process once you're ready to go live.

I look forward to your feedback!

Today, Shirley S. Wang of the Wall Street Journal published an article in the Health Section entitled Why So Many People Can't Make Decisions. The article discussed how our approach to decision-making can affect our lives and relationships. Some people make decisions rquickly, while others take longer.

• Some people are what psychologists categorize as ambivalent. They tend to weigh both the pros and cons when making decisions. And they take longer to make decisions.
• Other personalities see decisions as being more black and white. These folks tend to have strong positive or negative views, and require less time to make decisions.

The article caused me to consider both of these camps when thinking about sales and marketing campaigns, especially when we're using marketing automation applications like Eloqua, Marketo, and Sliverpop. Likewise, our general email marketing outreach should be segmented based on the different types of decision-makers. At the very least, we should be testing different messaging that appeals to these different buyer behaviors. The black and white-minded decision makers are probably going to respond more positively to a direct response type of message, while an ambivalent decision-maker is more likely to respond favorably to more information and time.

The Take Away

Always be testing. Adapt your marketing message to speak to both types of decision-makers.

• Think act now direct response messaging for the black and white decision makers: special offers, incentives, discounts.
• Use more of a progressive approach with the ambivalent people: white papers, case studies, statistics.

The convergence of marketing and sales has left some managers scratching their heads. What's the best way to approach commission programs and create compelling incentives that motivate both marketing and sales, working together?

Traditionally, marketing and sales have operated in segregated silos with separate incentive programs. Salespeople = brawn. Marketing = brains. Now that marketing and sales are increasingly working side by side, especially in the B2B world, what kinds of incentives and goals make sense?

B2B marketing automation software (eg. Eloqua, Marketo, Silverpop) has caused an awkward task for some organizations: how to get marketing and sales to the same table and agree on how to integrate lead generation, marketing automation and sales force automation with a predictable and smooth hand off from marketing to sales. This leads to re-working the incentive plan.

Should both marketing and sales be on a progressive, juicy commission plan?

Most upper-management and sales force personnel, as well as workers in many other jobs, are paid based on performance, which is widely perceived as motivating effort and enhancing productivity relative to non-contingent pay schemes. However, psychological research suggests that excessive rewards can in some cases produce supra-optimal motivation, resulting in a decline in performance. To test whether very high monetary rewards can decrease performance, we conducted a set of experiments at MIT, the University of Chicago, and rural India. Subjects in our experiment worked on different tasks and received performance-contingent payments that varied in amount from small to large relative to their typical levels of pay. With some important exceptions, we observed that high reward levels can have detrimental effects on performance. – Federal Reserve Bank of Boston

I think we can look to the 2005 Federal Reserve Bank of Boston Study for some revealing insight. The study demonstrates the paradox of how people will surprisingly perform more poorly if they are working under a tiered reward schedule that offers a really big carrot on a stick at the top end - like most sales organizations. So what's the secret to success? Dan Pink says we need to be working in an environment that allows:

1. Autonomy
2. Mastery & Challenge
3. Transcendent Purpose

Let's think about this...

1. Autonomy: Contrary to the hype and thinking of sales as "team," salespeople are largely autonomous. Sales isn't a team sport, per se. Management, however, may see sales as a team effort because that's how they get compensated - for overall performance. But the salesperson isn't necessarily thinking of the team's success when s/he closes a deal.

Because the art of sales is normally not mechanical and involves more than rudimentary cognitive skill, salespeople react favorably to environments where they are given an opportunity to pursue mastery and be challenged...

2. Mastery & Challenge: While most mature sales and marketing organizations encourage the development of advanced skills the time has come for marketing and sales to work on these skills together. For example, some progressive organizations encourage all levels (not just management) to devote a day, or two, to be creative and try to think up new ways of doing things better, or differently. This highly focused, free time together has the potential to birth some exciting new ways of approaching marketing and sales.

3. Self Purpose: Organizations should consider becoming more cult-like. Why? Because people who are involved with a goal that is larger than themselves, or larger than their company, or even industry, will reach deeper and produce extraordinary results. If a person's raison d'être becomes interwoven with their company's mission, there's a powerful synergy. Sales and marketing professionals will stick around if you've got a retention plan that involves intrinsic rewards.

What this means to executive management

Marketing and sales goals can, and should, align with what is most important to executive management:

• Higher revenues
• Lower costs...
• Leading to higher profitability
• Increase in market share, with new customers
• Increase in both short and long-term value for the shareholders

Start Small - Think Big - Adapt to Change

Our customers and prospects are everywhere. The trouble is they're not all in the same place at the same time. That's why we need to meet them where they're at.

Forrester Research senior VP of Idea Development Josh Bernoff recently wrote an article for AdAge. In it he discusses research that makes a case for encouraging workers to use technology to connect with customers. Josh goes on to recommend:

If your company shuts off access to sites like Facebook, Twitter, and YouTube, that has to stop, because you're shutting off your staff from the very places that will give them ideas of how to innovate in connecting to customers. —Josh Bernoff, Marketers Are More Likely to Innovate -- and Here's Proof

Good salespeople have traditionally been adept at meeting their prospects and customers face to face. Today, with increased adoption of technology to increase the efficiency of marketing it's become common that neither salespeople nor marketers will see their prospects during the entire nurturing process. How about once the prospect signs on as a paying customer? Sure, probably. But during the six-month sales process? Maybe not.

While lead nurturing software, like Marketo and Eloqua, allows marketers to manage a much higher volume of prospects, there's still a strong reliance on email as the central vein of outbound communication. Logic paths are carefully planned so certain emails are sent to certain people at certain times, all based on certain prospect/client activities or inactivity.

My question is, will email continue to prevail as the preferred method of communication? Moreover has email already fallen by the wayside as the best way to nurture all prospects and clients?

Don't get me wrong. Email marketing is generally effective, especially when customers and prospects have opted in and indicated it's their preferred method of contact. But relying solely on email to nurture prospects and customers may be inadequate, especially with the growing acceptance of other communication forms: SMS/text, Facebook, Twitter. And don't forget about the old school methods that many people still hold onto: face-to-face meetings, phone calls, and even snail mail! By the way, if you must send snail mail, use FedEx. It's still better at getting someone's attention. People will almost always open a FedEx overnight envelope.

The take away

Try not to accept technology for technology's sake. If you can use technology to become more efficient in some areas of marketing and sales that's great. But one software solution isn't going to take care of everything.